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SB-1174 • 2026

Public contracts: Department of Transportation: bid preferences: employee stock ownership plans.

Public contracts: Department of Transportation: bid preferences: employee stock ownership plans.

Labor Small Business
Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor
Valladares
Last action
2026-04-24
Official status
Set for hearing May 4.
Effective date
Not listed

Plain English Breakdown

The official source material does not provide details about the exact penalties or suspension periods for fraudulent behavior.

Department of Transportation Bid Preferences for ESOP Contractors

This law requires the Department of Transportation to give special advantages in bidding on state-funded construction projects to contractors that have an Employee Stock Ownership Plan (ESOP) starting January 1, 2028.

What This Bill Does

  • Requires the Department of Transportation to provide certain bid preferences to a contractor with an ESOP that bids on a state-funded construction contract starting January 1, 2028.

Who It Names or Affects

  • The Department of Transportation
  • Contractors with Employee Stock Ownership Plans (ESOPs)

Terms To Know

Employee Stock Ownership Plan (ESOP)
A type of retirement plan where employees own shares of the company they work for.

Limits and Unknowns

  • The bill does not specify what kind of benefits ESOP contractors will receive.
  • It is unclear how many companies currently have ESOPs and might be affected by this law.

Bill History

  1. 2026-04-24 California Legislative Information

    Set for hearing May 4.

  2. 2026-04-22 California Legislative Information

    From committee: Do pass and re-refer to Com. on APPR. with recommendation: To consent calendar. (Ayes 13. Noes 0.) (April 21). Re-referred to Com. on APPR.

  3. 2026-04-09 California Legislative Information

    Set for hearing April 21.

  4. 2026-04-08 California Legislative Information

    From committee: Do pass and re-refer to Com. on JUD. with recommendation: To consent calendar. (Ayes 12. Noes 0.) (April 7). Re-referred to Com. on JUD.

  5. 2026-03-17 California Legislative Information

    Set for hearing April 7.

  6. 2026-02-26 California Legislative Information

    Referred to Coms. on TRANS. and JUD.

  7. 2026-02-19 California Legislative Information

    From printer. May be acted upon on or after March 21.

  8. 2026-02-18 California Legislative Information

    Introduced. Read first time. To Com. on RLS. for assignment. To print.

Official Summary Text

SB 1174, as introduced, Valladares.
Public contracts: Department of Transportation: bid preferences: employee stock ownership plans.
Existing law establishes the Department of Transportation and requires it to improve and maintain the state highways. Existing law authorizes the department to enter into any contracts required for the performance of its duties, as provided. Existing law establishes bid preferences in public contracting for certain types of bidders, including, but not limited to, small business and microbusiness bidders.
This bill would, on and after January 1, 2028, require the department to provide certain bid preferences to a contractor with an employee stock ownership plan (ESOP) that bids on a state-funded construction contract, as specified. The bill would make it unlawful for a person or contractor to engage in specified behaviors related to the fraudulent obtaining or retaining of an ESOP bid preference and would subject a person or contractor engaged in
those behaviors to a suspension from bidding on or participating in any contract with the department for certain periods and specified civil penalties.

Current Bill Text

Read the full stored bill text 
Download Bill PDF